LEGISLATIVE COUNSEL'S DIGEST

Existing law, the California Residential Care Facilities for the Elderly Act, provides for the licensure of residential care facilities for the elderly by the State Department of Social Services. Existing law requires any person seeking a license for a residential care facility for the elderly to file an application with the department, as specified. Among other required application information, if the applicant is a firm, association, organization, partnership, business trust, corporation, or company, evidence of reputable and responsible character is required to be submitted as to the members or shareholders thereof, and the person in charge of the residential care facility for the elderly for which the application for issuance of license or special permit is made.

This bill would, among other things, additionally require the applicant to
disclose specified information, including whether it is a for-profit or not-for-profit provider, the name, address, and license number of other health, residential, or community care facilities owned, managed, or operated by the same applicant or by any parent organization of the applicant, and the name and address of any person, organization, or entity that owns the real property in which specified facilities are located. The bill would require an applicant to provide additional information, including evidence of the right of possession of the facility prior to the time the license is granted. The bill would also require the department to cross-check specified applicant information, if electronically available, with the State Department of Public Health to determine if the applicant has a prior history of operating, holding a position in, or having ownership in, specified licensed facilities. The bill would require the information specified in these provisions to be provided to the department upon initial
application for licensure, and any change in the information to be provided within 30 calendar days of the change, except as specified. The bill would authorize the department to assess an immediate civil penalty of $1,000 for a violation of these provisions subsequent to licensure.

Existing law requires the Director of Social Services to establish an automated license information system on licensees and former licensees of licensed residential care facilities for the elderly. The system is required to maintain a record of any information that may be pertinent for licensure.

This bill would require, to the extent that the department’s computer system can electronically accommodate additional information, the department to post on its Internet Web site specified information, including the current name, business address, and telephone number of the licensee.

Existing law authorizes
the department to deny any application for a license to operate a residential care facility for the elderly or to suspend or revoke a license on certain grounds, including, but not limited to, a violation by the licensee of applicable provisions or of the rules and regulations adopted under those provisions, conduct that is inimical to the health, morals, welfare, or safety of either an individual in or receiving services from the facility or the people of the state, or engaging in acts of financial malfeasance concerning the operation of a facility.

This bill would authorize those remedies to be applied if the department finds that specified persons or entities, including any employee, administrator, partner, officer, director, member, or manager of the applicant or licensee, has engaged in any of those conducts relating to specified licensed facilities in California or any other state. The bill would also authorize the department to deny an application for
licensure or to subsequently revoke a license if the applicant knowingly withheld material information, made a false statement of material fact with regard to information that was required by the application for licensure, or did not disclose administrative disciplinary actions on the application as required.

Digest Key

Vote:
MAJORITY
Appropriation:
NO
Fiscal Committee:
YES
Local Program:
NO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 1569.2 of the Health and Safety Code is amended to read:

1569.2.

As used in this chapter:

(a) “Administrator” means the individual designated by the licensee to act on behalf of the licensee in the overall management of the facility. The licensee, if an individual, and the administrator may be one and the same person.

(b) “Beneficial ownership interest” means an ownership interest through the possession of stock, equity in capital or any interest in the profits of the applicant or licensee or through the possession of such an interest in other entities that directly or indirectly hold an interest in the applicant or licensee. The percentage of beneficial ownership in the applicant or licensee that is
held by any other entity is determined by multiplying the other entities’ percentage of ownership interest at each level.

(c) “Care and supervision” means the facility assumes responsibility for, or provides or promises to provide in the future, ongoing assistance with activities of daily living without which the resident’s physical health, mental health, safety, or welfare would be endangered. Assistance includes assistance with taking medications, money management, or personal care.

(d) “Chain” means a group of two or more licensees that are controlled, as defined in this section, by the same persons or entities.

(e) “Control” means the ability to direct the operation or management of the applicant or licensee and includes the ability to exercise control through intermediary or subsidiary entities.

(m) “Personal care” means assistance with personal activities of daily living, to help provide for and maintain physical and psychosocial comfort.

(n) “Protective supervision” means observing and assisting confused residents, including persons with dementia, to safeguard them against injury.

(o) (1) “Residential care facility for the elderly” means a housing arrangement chosen voluntarily by persons 60 years of age or over, or
their authorized representative, where varying levels and intensities of care and supervision, protective supervision, or personal care are provided, based upon their varying needs, as determined in order to be admitted and to remain in the facility. Persons under 60 years of age with compatible needs may be allowed to be admitted or retained in a residential care facility for the elderly as specified in Section 1569.316.

(2) This subdivision shall be operative only until the enactment of legislation implementing the three levels of care in residential care facilities for the elderly pursuant to Section 1569.70.

(p) “Residential care facility for the elderly” means a housing arrangement chosen voluntarily by persons 60 years of age or over, or their authorized representative, where varying levels and intensities of care and supervision, protective supervision, personal care, or
health-related services are provided, based upon their varying needs, as determined in order to be admitted and to remain in the facility. Persons under 60 years of age with compatible needs may be allowed to be admitted or retained in a residential care facility for the elderly as specified in Section 1569.316.

This subdivision shall become operative upon the enactment of legislation implementing the three levels of care in residential care facilities for the elderly pursuant to Section 1569.70.

(q) “Sundowning” means a condition in which persons with cognitive impairment experience recurring confusion, disorientation, and increasing levels of agitation that coincide with the onset of late afternoon and early evening.

(r) “Supportive services” means resources available to the resident in the community that help to maintain their
functional ability and meet their needs as identified in the individual resident assessment. Supportive services may include any of the following: medical, dental, and other health care services; transportation; recreational and leisure activities; social services; and counseling services.

SEC. 2.

Section 1569.15 of the Health and Safety Code is amended to read:

1569.15.

(a) Any person seeking a license for a residential care facility for the elderly under this chapter shall file with the department, pursuant to regulations, an application on forms furnished by the department, that shall include, but not be limited to, all of the following:

(1) Evidence satisfactory to the department of the ability of the applicant to comply with this chapter and of rules and regulations adopted under this chapter by the department.

(2) Evidence satisfactory to the department that the applicant is of reputable and responsible character. The evidence shall include, but not be limited to, a criminal
record clearance pursuant to Section 1569.17, employment history, and character references. If the applicant is a firm, association, organization, partnership, business trust, corporation, or company, like evidence shall be submitted as to the individuals or entities holding a beneficial ownership interest of 10 percent or more, and the person who has operational control of the residential care facility for the elderly for which the application for issuance of license or special permit is made. Notwithstanding anything in this section, an applicant or licensee is not required to disclose the names of investors in a publicly traded company or investment fund if those investors are silent investors who do not have influence or control over operations of the company, fund, or facility.

(3) If applicable, the following information:

(A) Whether it is a for-profit or not-for-profit
provider.

(B) The name, address, license number, and licensing agency name of other health, residential, or community care facilities owned, managed, or operated by the same applicant or by any parent organization of the applicant.

(C) The name and business address of any person or entity that controls, as defined in Section 1569.2, the applicant.

(D) If part of a chain, as defined in Section 1569.2, a diagram indicating the relationship between the applicant and the persons or entities that are part of the chain, including those that are controlled by the same parties, and in a separate list, the name, address, and license number, if applicable, for each person or entity in the diagram.

(E) The name and address of any persons, organizations, or
entities that own the real property on which the facility seeking licensure and the licensed facilities described in subparagraph (B) are located.

(F) The name and address of any management company serving the facility and the same information required of applicants in subparagraphs (C) and (D) for the management company.

(4) Evidence satisfactory to the department that the applicant has sufficient financial resources to maintain the standards of service required by regulations adopted pursuant to this chapter.

(5) The name of the person with operational control of the applicant, such as the chief executive officer, general partner, owner or like party, and state that person’s prior or present service as an administrator, chief executive officer, general partner, director like role of, or as a person who has held or
holds a beneficial ownership interest of 10 percent or more in, any residential care facility for the elderly, in any facility licensed pursuant to Chapter 1 (commencing with Section 1200), Chapter 2 (commencing with Section 1250), or Chapter 3 (commencing with Section 1500), or a similarly licensed facility in California or any other state within the past 10 years.

(6) The following information regarding the applicant and each individual or entity identified pursuant to paragraph (5):

(A) Any revocation, suspension, probation, exclusion order, or other similar administrative disciplinary action that was filed and sustained in California or any other state, or in the process of being adjudicated, against a facility associated with a person identified pursuant to paragraph (5) or by any authority responsible for the licensing of health, residential, or community care facilities
within the past 10 years.

(B) Copies of final findings, orders, or both, issued by any health, residential, or community care licensing agency or any court relevant to the actions described in subparagraph (A).

(C) Any petition for bankruptcy relief filed within five years of the date of application involving operation or closure of a health, residential, or community care facility licensed in California or any other state, the court, date, and case number of the filing, and whether a discharge was granted. If a discharge was not granted, the applicant shall provide copies of any court findings supporting denial of discharge.

(7) Any other information as may be required by the department for the proper administration and enforcement of this chapter.

(8) Following the implementation of Article 7 (commencing with Section 1569.70), evidence satisfactory to the department of the applicant’s ability to meet regulatory requirements for the level of care the facility intends to provide.

(9) Evidence satisfactory to the department of adequate knowledge of supportive services and other community supports that may be necessary to meet the needs of elderly residents.

(10) A signed statement that the person desiring issuance of a license has read and understood the residential care facility for the elderly statute and regulations.

(11) Designation by the applicant of the individual who shall be the administrator of the facility, including, if the applicant is an individual, whether or not the applicant shall also be the administrator.

(12) Evidence of the right of possession of the facility prior to the time the license is granted, which may be satisfied by the submission of a copy of the entire lease agreement or deed.

(14) For any facility that promotes or advertises or plans to promote or advertise special care, special programming, or special environments for persons with dementia, disclosure to the department of the special features of the facility in its plan of operation.

(b) The department shall cross-check all applicant information disclosed pursuant to paragraph (5) of subdivision (a), if electronically available, with the State Department of Public Health to
determine if the applicant has a prior history of operating, holding a position in, or having ownership in, any entity specified in paragraph (5) of subdivision (a).

(c) Failure of the applicant to cooperate with the licensing agency in the completion of the application may result in the denial of the application. Failure to cooperate means that the information described in this section and in the regulations of the department has not been provided, or has not been provided in the form requested by the licensing agency, or both.

(d) The information required by this section shall be provided to the department upon initial application for licensure, and any change in the information shall be provided to the department within 30 calendar days of that change unless a shorter timeframe is required by the department. A licensee of multiple facilities may provide a single notice of
changes to the department on behalf of all licensed facilities within the chain. Information pertaining to facilities operated in other states may be updated on an annual basis, except for the following information:

(1) Information specified in paragraph (6) of subdivision (a) shall be updated within 30 calendar days of the change.

(2) Information specified in subparagraph (B) of paragraph (3) of subdivision (a) shall be updated within six months after the change.

(e) An applicant or licensee shall maintain an email address of record with the department. The applicant or licensee shall provide written notification to the department of the email address and of any change to the email address within 10 business days of the change.

(f) (1) The department may deny an application for licensure or may subsequently revoke a license under this chapter if the applicant knowingly withheld material information or made a false statement of material fact with regard to information that was required by the application for licensure.

(2) The department may deny an application for licensure or may subsequently revoke a license under this chapter if the applicant did not disclose administrative disciplinary actions on the application as required by paragraph (6) of subdivision (a).

(3) In addition to the remedies provided under this chapter, the department may, subsequent to licensure, assess a civil penalty of one thousand dollars ($1,000) for a material violation of this section.

SEC. 3.

Section 1569.16 of the Health and Safety Code is amended to read:

1569.16.

(a) (1) If an application for a license indicates, or the department determines during the application review process, that the applicant previously was issued a license under this chapter or under Chapter 1 (commencing with Section 1200), Chapter 2 (commencing with Section 1250), Chapter 3 (commencing with Section 1500), Chapter 3.01 (commencing with Section 1568.01), Chapter 3.4 (commencing with Section 1596.70), Chapter 3.5 (commencing with Section 1596.90), or Chapter 3.6 (commencing with Section 1597.30) and the prior license was revoked within the preceding two years, the department shall cease any further review of the application until two years have elapsed from the date of the revocation. All residential care
facilities for the elderly are exempt from the health planning requirements contained in Part 2 (commencing with Section 127125) of Division 107.

(2) If an application for a license or special permit indicates, or the department determines during the application review process, that the applicant previously was issued a certificate of approval by a foster family agency that was revoked by the department pursuant to subdivision (b) of Section 1534 within the preceding two years, the department shall cease any further review of the application until two years shall have elapsed from the date of the revocation.

(3) If an application for a license or special permit indicates, or the department determines during the application review process, that the applicant was excluded from a facility licensed by the department pursuant to Section 1558, 1568.092, 1569.58, or 1596.8897, the
department shall cease any further review of the application unless the excluded individual has been reinstated pursuant to Section 11522 of the Government Code by the department.

(b) If an application for a license or special permit indicates, or the department determines during the application review process, that the applicant had previously applied for a license under any of the chapters listed in paragraph (1) of subdivision (a) and the application was denied within the last year, the department shall, except as provided in Section 1569.22, cease further review of the application until one year has elapsed from the date of the denial letter. In those circumstances where denials are appealed and upheld at an administrative hearing, review of the application shall cease for one year from the date of the decision and order being rendered by the department. The cessation of review shall not constitute a denial of the application. If there are
coapplicants and the department denies a license due to concerns pertaining solely to one of the coapplicants, any other coapplicant may withdraw its application, and with the department’s written consent pursuant to Section 1569.52, shall not be deemed to have a license application denied.

(c) If an application for a license or special permit indicates, or the department determines during the application review process, that the applicant had previously applied for a certificate of approval with a foster family agency and the department ordered the foster family agency to deny the application pursuant to subdivision (b) of Section 1534, the department shall cease further review of the application as follows:

(1) In cases where the applicant petitioned for a hearing, the department shall cease further review of the application until one year has elapsed from the effective date of
the decision and order of the department upholding a denial.

(2) In cases where the department informed the applicant of his or her right to petition for a hearing and the applicant did not petition for a hearing, the department shall cease further review of the application until one year has elapsed from the date of the notification of the denial and the right to petition for a hearing.

(3) The department may continue to review the application if it has determined that the reasons for the denial of the application were due to circumstances and conditions that either have been corrected or are no longer in existence.

(d) The cessation of review shall not constitute a denial of the application for purposes of Section 1526 or any other law.

SEC. 4.

Section 1569.356 is added to the Health and Safety Code, to read:

1569.356.

To the extent that the department’s computer system can electronically accommodate additional residential care facility for the elderly profile information, the department shall post on its Internet Web site the current name, business address, and telephone number of the licensee, the name of the owner of the residential care facility for the elderly, if not the same as the licensee, the name of any parent organization, the licensed capacity of the facility, including the capacity for nonambulatory residents, whether the facility is permitted to accept and retain residents receiving hospice care services, whether the facility has a special care unit or program for people with Alzheimer’s disease and other dementias and has a delayed egress or secured perimeter system in place, or both,
and information required pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of Section 1569.15.

SEC. 5.

Section 1569.50 of the Health and Safety Code is amended to read:

1569.50.

(a) The department may deny an application for a license or may suspend or revoke a license issued under this chapter upon any of the following grounds and in the manner provided in this chapter:

(1) Violation by the licensee of this chapter or of the rules and regulations adopted under this chapter.

(2) Aiding, abetting, or permitting the violation of this chapter or of the rules and regulations adopted under this chapter.

(3) Conduct that is inimical to the health, morals, welfare, or safety of either an individual in or receiving services from the facility or the people of the State of
California.

(4) The conviction of a licensee, or other person mentioned in Section 1569.17 at any time before or during licensure, of a crime as defined in Section 1569.17.

(5) Engaging in acts of financial malfeasance concerning the operation of a facility, including, but not limited to, improper use or embezzlement of client moneys and property or fraudulent appropriation for personal gain of facility moneys and property, or willful or negligent failure to provide services for the care of clients.

(b) The remedies provided in this section may be applied if the department finds that any employee, administrator, partner, officer, director, member, or manager of the applicant or licensee, any person who controls, as defined in Section 1569.2, the licensee, or any person who holds a beneficial ownership interest of 10
percent or more in the applicant or licensee has engaged in the conduct described in subdivision (a) related to any facility licensed pursuant to Chapter 1 (commencing with Section 1200), Chapter 2 (commencing with Section 1250), or Chapter 3 (commencing with Section 1500), or a similarly licensed facility in California or any other state.

(c) The director may temporarily suspend a license, prior to a hearing when, in the opinion of the director, the action is necessary to protect residents or clients of the facility from physical or mental abuse, abandonment, or any other substantial threat to health or safety. The director shall notify the licensee of the temporary suspension and the effective date of the temporary suspension and at the same time shall serve the provider with an accusation. Upon receipt of a notice of defense to the accusation by the licensee, the director shall, within 15 days, set the matter for hearing, and the hearing
shall be held as soon as possible but not later than 30 days after receipt of the notice. The temporary suspension shall remain in effect until the time the hearing is completed and the director has made a final determination on the merits. However, the temporary suspension shall be deemed vacated if the director fails to make a final determination on the merits within 30 days after the original hearing has been completed.

(d) A licensee who abandons the facility and the residents in care resulting in an immediate and substantial threat to the health and safety of the abandoned residents, in addition to revocation of the license pursuant to this section, shall be excluded from licensure in facilities licensed by the department without the right to petition for reinstatement.

SEC. 6.

Section 1569.58 of the Health and Safety Code is amended to read:

1569.58.

(a) The department may prohibit any person from being a licensee, owning a beneficial ownership interest of 10 percent or more in a licensed facility, or being an administrator, officer, director, member, or manager of a licensee or entity controlling a licensee, and may further prohibit any licensee from employing, or continuing the employment of, or allowing in a licensed facility, or allowing contact with clients of a licensed facility by, any employee, prospective employee, or person who is not a client and who has done any of the following:

(1) Violated, or aided or permitted the violation by any other person of, any provisions of this chapter or of any rules or regulations
promulgated under this chapter.

(2) Engaged in conduct that is inimical to the health, morals, welfare, or safety of either an individual in or receiving services from the facility, or the people of the State of California.

(3) Been denied an exemption to work or to be present in a facility, when that person has been convicted of a crime as defined in Section 1569.17.

(4) Engaged in any other conduct that would constitute a basis for disciplining a licensee.

(5) Engaged in acts of financial malfeasance concerning the operation of a facility, including, but not limited to, improper use or embezzlement of client moneys and property or fraudulent appropriation for personal gain of facility moneys and property, or willful or negligent failure to provide
services for the care of clients.

(b) The excluded person, the facility, and the licensee shall be given written notice of the basis of the department’s action and of the excluded person’s right to an appeal. The notice shall be served either by personal service or by registered mail. Within 15 days after the department serves the notice, the excluded person may file with the department a written appeal of the exclusion order. If the excluded person fails to file a written appeal within the prescribed time, the department’s action shall be final.

(c) (1) The department may require the immediate removal of a member of the board of directors, an executive director, or an officer of a licensee or exclusion of an employee, prospective employee, or person who is not a client from a facility pending a final decision of the matter, when, in the opinion of the
director, the action is necessary to protect residents or clients from physical or mental abuse, abandonment, or any other substantial threat to their health or safety.

(2) If the department requires the immediate removal of a member of the board of directors, an executive director, or an officer of a licensee or exclusion of an employee, prospective employee, or person who is not a client from a facility the department shall serve an order of immediate exclusion upon the excluded person that shall notify the excluded person of the basis of the department’s action and of the excluded person’s right to a hearing.

(3) Within 15 days after the department serves an order of immediate exclusion, the excluded person may file a written appeal of the exclusion with the department. The department’s action shall be final if the excluded person does not appeal the exclusion within the
prescribed time. The department shall do the following upon receipt of a written appeal:

(A) Within 30 days of receipt of the appeal, serve an accusation upon the excluded person.

(B) Within 60 days of receipt of a notice of defense by the excluded person pursuant to Section 11506 of the Government Code, conduct a hearing on the accusation.

(4) An order of immediate exclusion of the excluded person from the facility shall remain in effect until the hearing is completed and the director has made a final determination on the merits. However, the order of immediate exclusion shall be deemed vacated if the director fails to make a final determination on the merits within 60 days after the original hearing has been completed.

(d) An excluded person who files
a written appeal of the exclusion order with the department pursuant to this section shall, as part of the written request, provide his or her current mailing address. The excluded person shall subsequently notify the department in writing of any change in mailing address, until the hearing process has been completed or terminated.

(e) Hearings held pursuant to this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Division 3 of Title 2 of the Government Code. The standard of proof shall be the preponderance of the evidence and the burden of proof shall be on the department.

(f) The department may institute or continue a disciplinary proceeding against a member of the board of directors, an executive director, or an officer of a licensee or an employee, prospective employee, or person who is not a client upon any ground provided by this
section. The department may enter an order prohibiting any person from being a member of the board of directors, an executive director, or an officer of a licensee, or prohibiting the excluded person’s employment or presence in the facility, or otherwise take disciplinary action against the excluded person, notwithstanding any resignation, withdrawal of employment application, or change of duties by the excluded person, or any discharge, failure to hire, or reassignment of the excluded person by the licensee or that the excluded person no longer has contact with clients at the facility.

(g) A licensee’s failure to comply with the department’s exclusion order after being notified of the order shall be grounds for disciplining the licensee pursuant to Section 1569.50.

(h) (1) (A) In cases where the excluded person appealed the exclusion
order and there is a decision and order of the department upholding the exclusion order, the person shall be prohibited from working in any facility or being licensed to operate any facility licensed by the department or from being a certified foster parent for the remainder of the excluded person’s life, unless otherwise ordered by the department.

(B) The excluded individual may petition for reinstatement one year after the effective date of the decision and order of the department upholding the exclusion order pursuant to Section 11522 of the Government Code. The department shall provide the excluded person with a copy of Section 11522 of the Government Code with the decision and order.

(2) (A) In cases where the department informed the excluded person of his or her right to appeal the exclusion order and the excluded person did not appeal the exclusion
order, the person shall be prohibited from working in any facility or being licensed to operate any facility licensed by the department or a certified foster parent for the remainder of the excluded person’s life, unless otherwise ordered by the department.

(B) The excluded individual may petition for reinstatement after one year has elapsed from the date of the notification of the exclusion order pursuant to Section 11522 of the Government Code. The department shall provide the excluded person with a copy of Section 11522 of the Government Code with the exclusion order.

SEC. 7.

Section 1569.618 of the Health and Safety Code is amended to read:

1569.618.

(a) The administrator designated by the licensee pursuant to paragraph (11) of subdivision (a) of Section 1569.15 shall be present at the facility during normal working hours. A facility manager designated by the licensee with notice to the department, shall be responsible for the operation of the facility when the administrator is temporarily absent from the facility.

(b) At least one administrator, facility manager, or designated substitute who is at least 21 years of age and has qualifications adequate to be responsible and accountable for the management and administration of the facility pursuant to Title 22 of the California Code of Regulations shall be on the premises 24 hours per day. The designated substitute may
be a direct care staff member who shall not be required to meet the educational, certification, or training requirements of an administrator. The designated substitute shall meet qualifications that include, but are not limited to, all of the following:

(1) Knowledge of the requirements for providing care and supervision appropriate to each resident of the facility.

(2) Familiarity with the facility’s planned emergency procedures.

(3) Training to effectively interact with emergency personnel in the event of an emergency call, including an ability to provide a resident’s medical records to emergency responders.

(c) The facility shall employ, and the administrator shall schedule, a sufficient number of staff members to do all of the following:

(1) Provide the care required in each resident’s written record of care as described in Section 1569.80.

(2) Ensure the health, safety, comfort, and supervision of the residents.

(3) Ensure that at least one staff member who has cardiopulmonary resuscitation (CPR) training and first aid training is on duty and on the premises at all times. This paragraph shall not be construed to require staff to provide CPR.

(4) Ensure that the facility is clean, safe, sanitary, and in good repair at all times.

(d) “Facility manager” means a person on the premises with the authority and responsibility necessary to manage and control the day-to-day operation of a residential care facility for the elderly and
supervise the clients. The facility manager, licensee, and administrator, or any combination thereof, may be the same person provided he or she meets all applicable requirements. If the administrator is also the facility manager for the same facility, he or she shall be limited to the administration and management of only one facility.